Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
- Support policies needed to develop green hydrogen
- Mixed tax regime not yet applied on beer and alcohol products
- Compilation board established to guide implementation of Law on Real Estate Business
- Vietnam to develop legal framework on virtual assets
- NA discusses amended Law on Credit Institutions during extraordinary general meeting
Find more details as below:
1. Support policies needed to develop green hydrogen
Some highlines are as below:
- According to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, hydrogen has been recognised as a clean and indispensable energy source in the energy structure of many countries to achieve the goal of carbon neutrality by 2050.
- As of early 2023, more than 40 countries have issued national hydrogen strategies and major financial support policies to form and develop the hydrogen industry. In particular, the EU aims to produce green hydrogen to account for 13-14% of the bloc’s energy structure by 2050 while Japan and the Republic of Korea target to develop clean hydrogen, including green hydrogen and blue hydrogen, respectively, to account for 10% and 33% in their national energy structure by 2050.
- In Vietnam, the Ministry of Industry and Trade is drafting a Hydrogen Production Strategy and deploying gas power and offshore wind power projects according to the Politburo’s Resolution No. 55-NQ/TW on the strategic orientation of Vietnam’s national energy development until 2030 with a vision to 2045 and Decision No. 893/QĐ-TTg on the National Energy Master Plan for the 2021-30 period with a vision to 2050.
- Under the draft strategy, Vietnam will promote the development of hydrogen energy production and hydrogen-derived fuels in potential areas to target a hydrogen output of 100,000-500,000 tonnes by 2030 and 10-20 million tonnes by 2050.
2. Mixed tax regime not yet applied on beer and alcohol products
Some highlines are as below:
- This decision is made in accordance with the Prime Minister-approved tax system reform strategy by 2030 and the country’s commitments upon joining the World Trade Organization (WTO).
- The Government has decided not to apply the mixed tax regime on beer and alcohol products. This was stated in the newly-promulgated Resolution No 25/NQ-CP on the building of the amended Law on Special Consumption Tax.
- According to the resolution, the Government basically agreed with the content of receiving, explaining, and revising the dossier proposing to develop the amended Law on Special Consumption Tax in Report No 25/TTr-BTC which was submitted by the Ministry of Finance (MoF) on February 6, 2024.
- Regarding the progress of submitting the law project, the resolution clearly stated that the Government has proposed to the National Assembly Standing Committee to include the law project in the 2024 Law and Ordinance development program during the 7th session in May 2024.
- Many countries have utilised this method to restrict the production and consumption of items that are detrimental to health. However, a major shortcoming is that it fails to adjust adequately to price fluctuations during periods of inflation or deflation.
- On the other hand, we have not currently applied the mixed or absolute tax calculation method for alcohol and beer products, so the advantages of this method are still in the research process, but in practice it has not been proven.
3. Compilation board established to guide implementation of Law on Real Estate Business
Some highlines are as below:
- The Ministry of Construction has established a board to compile a decree guiding the implementation of the revised Law on Real Estate Business.
- The board has 34 members and is chaired by Deputy Minister of Construction Nguyen Van Sinh. The National Assembly adopted the revised law on November 28, 2023.
- It regulates the real estate business, the rights and obligations of organizations and individuals in the real estate business, and State management over the field. The law is scheduled to take effect on January 1, 2025.
- Under the law, the State policy is to encourage organizations and individuals from different economic sectors to invest in the real estate business in line with the country’s socio-economic development goals in different periods and different regions.
- It also invests in and encourages organizations and individuals to invest in infrastructure works outside the scope of projects, as well as public works and social infrastructure.
4. Vietnam to develop legal framework on virtual assets
Some highlines are as below:
- Vietnam will develop a legal framework to prohibit or regulate virtual assets and virtual asset service providers, which is expected to be completed by May 2025.
- This is one among 17 specific actions outlined in a national action plan issued recently by the government to implement its commitment to preventing and combating money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction.
- The goal is to realize the National Action Plan to implement the government’s commitment with the Financial Action Task Force (FATF), so as to soon remove the country from the Increased Monitoring List (Grey List) on the basis of ensuring maximum national interest.
- Other actions include demonstrating that relevant authorities have improved their understanding of money laundering / terrorist financing risks and are taking steps to mitigate these risks through the implementation of strategies and policies, and establishing effective cooperation, coordination, and communications between relevant agencies.
- Law enforcement and prosecution agencies will prioritize parallel financial investigations and demonstrate a significant and sustainable increase in the number of money laundering investigations and prosecutions, consistent with Vietnam’s money laundering risk profile.
5. NA discusses amended Law on Credit Institutions during extraordinary general meeting
- The amended Law on Credit Institutions aims to enhance the autonomy and responsibility of credit institutions (CIs), strengthen the resilience of the CI system and improve the supervision, inspection and monitoring of Việt Nam’s banking sector, said Chairman of the National Assembly’s Economic Committee Vũ Hồng Thanh during the NA’s extraordinary general meeting in Hà Nội on Monday.
- The amended law stipulated that before the end of the fiscal year, CIs and foreign bank branches must choose an independent audit organisation that meets the requirements set by the Governor of the State Bank of Vietnam (SBV) to audit financial reports and conduct internal control audits for the presentation of financial reports in the following fiscal year.
- Regarding delegation and agency operations, the NA’s Standing Committee added new provisions allowing “Commercial banks may act as insurance agents following insurance business laws, in line with the scope of insurance agency activities specified by the Governor of the SBV.”
- In addition, the amended law allowed the SBV to inspect, audit, and supervise credit institutions, foreign bank branches, and representative offices of foreign banks under current laws and regulations.
- After the adoption of the amendments, the law consisted of 15 chapters and 210 articles. It is anticipated that the law will come into effect on January 1, 2025.